We present empirical evidence that euro area banks following a retail-oriented financial intermediation business model exhibit a lower level of non-performing loans in their loan portfolio compared to the banks involved to a larger degree in market activities. This result is confirmed separately for the subsets of banks operating in distress and non-distress countries. We primarily utilise a business model classification that is underpinned by granular confidential supervisory data collected in the context of the EU Single Supervisory Mechanism. We control for macroeconomic developments, a number of bank-specific determinants and endogeneity, using an instrumental variables approach. Our results remain robust to the application of a wide range of specifications and estimation methods.
Do retail-oriented banks have less non-performing loans? / Farne, Matteo; Vouldis, Angelos. - In: JOURNAL OF ECONOMIC ASYMMETRIES. - ISSN 1703-4949. - ELETTRONICO. - 29:(2024), pp. e00358-N/A. [10.1016/j.jeca.2024.e00358]
Do retail-oriented banks have less non-performing loans?
Farne, Matteo;
2024
Abstract
We present empirical evidence that euro area banks following a retail-oriented financial intermediation business model exhibit a lower level of non-performing loans in their loan portfolio compared to the banks involved to a larger degree in market activities. This result is confirmed separately for the subsets of banks operating in distress and non-distress countries. We primarily utilise a business model classification that is underpinned by granular confidential supervisory data collected in the context of the EU Single Supervisory Mechanism. We control for macroeconomic developments, a number of bank-specific determinants and endogeneity, using an instrumental variables approach. Our results remain robust to the application of a wide range of specifications and estimation methods.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.